2024 (2) TMI 26 - AT - Customs

Appeal allowed against customs broker license revocation due to mandatory time limits violation under CBLR 2018

CESTAT Ahmedabad allowed the appeal challenging revocation of customs broker license, forfeiture of security deposit, and penalty under Regulation 18 of ... Mandatory nature of time-limits in regulatory proceedings - Customs Brokers Licensing Regulations, 2018 - compliance with prescribed timelines - Consequences of non-compliance with procedural time-limits - perpetuation of suspension - Validity of inquiry report and subsequent orders when timelines breached - Board Circular No. 9/2010 - overall time-frame for suspension/revocation proceedingsMandatory nature of time-limits in regulatory proceedings - Customs Brokers Licensing Regulations, 2018 - compliance with prescribed timelines - Time-limits prescribed under the Customs Brokers Licensing Regulations, 2018 are mandatory and not merely directory. - HELD THAT: - The Tribunal examined earlier decisions of this Court and other High Courts and Coordinated Benches which have held that the staged 90-day limits (for issuance of show cause notice, preparation/submission of inquiry report and passing of final order) and the overall timetable envisaged by Board Circular No. 9/2010 are mandatory. The court rejected the contention that absence of an express statutory consequence in the Regulations renders the timelines directory, reasoning that the obvious and intended consequence of non-compliance is perpetuation of suspension and irremediable prejudice to the licensee's business. Reliance was placed on precedent holding that an inquiry report prepared or submitted beyond the prescribed period cannot be treated as a valid report and that follow-up proceedings based on such report are vitiated. The Tribunal accordingly concluded that the timelines in CBLR, 2018 must be complied with mandatorily. [Paras 4]The time-limits in CBLR, 2018 are mandatory and must be observed.Validity of inquiry report and subsequent orders when timelines breached - Consequences of non-compliance with procedural time-limits - perpetuation of suspension - Whether the departmental failure to comply with the timelines in the present case vitiates the proceedings and warrants relief to the appellant. - HELD THAT: - The Tribunal applied the mandatory-timelines principle to the facts: the show cause notice, inquiry report and final order were each issued beyond the respective 90-day periods as set out in the judgment's tabulation (delays identified against Regulation 17(1), 17(5) and 17(7)). Having found breaches of the prescribed time-limits and in the absence of any binding contrary decision from the Gujarat High Court or any superseding Board circular, the Tribunal held that the departmental actions could not be continued and that the suspension was therefore bad in law. The Tribunal expressly did not adjudicate other merits but granted relief on the limitation ground, observing that the lapse on the part of the authority precluded further proceedings under the Regulations. [Paras 4, 5]Departmental non-compliance with the CBLR time-limits vitiated the proceedings; the appeal is allowed and suspension is revoked (relief granted on limitation ground).Final Conclusion: The Tribunal held that the time-limits prescribed under the Customs Brokers Licensing Regulations, 2018 are mandatory; because the authority failed to comply with those timelines in the present case (as tabulated in the order), the proceedings based on the belated acts were vitiated and the appeal was allowed, with revocation of the suspension (relief granted on the limitation ground without expressing a view on merits). Issues Involved:1. Compliance with time limits prescribed under the Customs Brokers Licensing Regulation (CBLR), 2018.2. Conduct of the enquiry process.3. Nature of time limits under CBLR, 2018 - whether mandatory or directory.Summary:1. Compliance with Time Limits Prescribed Under CBLR, 2018:The appellant, M/s. Ashapura Shipping Agency, challenged the revocation of their Customs Broker license, forfeiture of the security deposit, and imposition of a penalty u/s Regulation 18 of CBLR, 2018. The appellant argued that the time limits prescribed under CBLR, 2018 were not adhered to by the department. Specifically, Regulation 17(1) mandates the issuance of a show-cause notice within 90 days from the receipt of the office offence report, which was delayed by 14 days. Regulation 17(5) requires the enquiry report to be prepared within 90 days from the date of the show-cause notice, delayed by 66 days. Regulation 17(7) mandates the final order to be passed within 90 days from the date of the enquiry report, delayed by 31 days. The appellant contended that these time limits are mandatory, and failure to adhere to them vitiates the entire proceeding.2. Conduct of the Enquiry Process:The appellant also argued that the enquiry process was conducted in a biased and summary manner. They pointed out that no statement of Shri Ashok Bhanushali, the main partner of the appellant firm, was recorded despite multiple summons. The enquiry report did not engage in any examination-in-chief or cross-examination and failed to independently examine any documents. The enquiry officer merely reproduced the provisions of law and concluded the charges against the appellant without examining the facts or law.3. Nature of Time Limits Under CBLR, 2018 - Mandatory or Directory:The Tribunal examined whether the time limits prescribed in CBLR, 2018 are mandatory or directory. Referring to various decisions, including the case of Krishna Shipping and Allied Services, the Tribunal concluded that the time limits prescribed are mandatory. The Tribunal noted that failure to adhere to these time limits renders the actions of the revenue under CBLR barred by limitation.Conclusion:The Tribunal found that the department failed to follow the mandatory time limits prescribed in CBLR, 2018, as detailed in the table in Para 4.1 of the judgment. Consequently, the Tribunal allowed the appeal, revoking the suspension of the Customs Broker license and setting aside the impugned order. The appeal was pronounced in open court on 30.01.2024.